TAX TAKE: Pressure Drop: Potential Deadline(s) for Build Back Better
As Congress comes back into session this week, expect the White House and Democrats to begin efforts to revive the Build Back Better Act (BBBA), likely a rebranded, slimmed-down version of last year's BBBA. Discussions between the White House and Senator Joe Manchin (D-WV) have continued, although whether a compromise can be reached is still unclear. Assuming a deal can come together soon-ish, your friends at Tax Take have received this question a lot: What are the potential deadlines for Congress to pass the next iteration of BBBA?
Here is our attempt to address this trillion-dollar question.
- Memorial Day: Members of Congress have speculated Memorial Day as one potential deadline to pass BBBA. However, that is only five weeks away and, the House and Senate are only going to be in session at the same time for three of those five weeks. For these reasons, it is unlikely for both chambers to consider and pass BBBA by Memorial Day.
- July 4 and August Recess: If in the next couple of weeks we begin seeing an agreement come together between Senator Manchin and the White House, it is conceivable for the House and Senate to consider BBBA by the July 4 recess. A lot would have to happen by then: House and Senate negotiations, legislative drafting, rulings from the Senate Parliamentarian on what can pass under the reconciliation rules, and final budget estimates from the Joint Committee on Taxation (JCT) and the Congressional Budget Office (CBO). That's a lot to happen in two and a half months, and we know from last fall that CBO can take a while to provide a budget score given the intricacies of major legislation. If July 4 is not achievable, look for the August recess to be the next potential backstop. The August recess is sacrosanct in Congress and it has a way to speed up legislative negotiations – which can be especially true this year ahead of the November midterm elections when members of Congress prefer being back home campaigning.
- September 30: The instructions for the Fiscal Year (FY) 2022 budget reconciliation bill, the authorizing vehicle for BBBA, expire on September 30 – the end of the current fiscal year. That is the ultimate deadline for passing BBBA, absent Democrats passing another reconciliation bill for FY 2023, which is unlikely. If Congress can't pass BBBA by the end of summer, look for September as their last chance.
The coming Congressional work period could be critical for BBBA and its prospects. As the November midterm elections get closer, look for pressure to mount on Democrats to act on their BBBA legislative priorities. #TaxTake
Upcoming Speaking Engagements and Events
On April 26, Marc will moderate a panel titled "Retirement Policy's Path Ahead: 2022 Legislative Outlook," at the ERIC Spring 2022 Virtual Policy Conference.
Loren and fellow Tax Members Kevin Kenworthy and Rocco Femia will present "International Tax Agreements in an Era of Congressional and Political Polarization" at the American Petroleum Institute's 87th Annual Federal Tax Forum on May 4.
On May 4, Marc will provide a Tax Legislative Review and Outlook to the Tax Executives Institute's Denver Chapter.
Loren will moderate the "International Tax: Outbound Tax Developments" panel at the DC Bar 2022 Tax Legislative and Regulatory Update Conference on May 4.
Marc will present "Federal Tax Policy Update," at the Manufacturers Alliance Tax Council Spring Meeting on May 19.
In the News
In CQ News, Jorge commented on the prospect of a post-election tax legislation saying dropping some tax pieces out of Democrats' budget package could help them trim that bill and boost the likelihood of its passage.
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